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Two Vinashin’s international creditors raise their voices   2012-04-05 - TBKTVN

The US hedge fund Elliott Advisers LP has decided to drop a lawsuit against the Vietnam Shipbuilding Industry Group (Vinashin). Meanwhile, a Malaysian creditor has stated that the value of the loan provided by the bank to Vinashin is very small.


The Wall Street Journal has quoted its source as saying that Elliot has decided to wave its claim against the Vietnamese shipbuilder in the UK. In November 2011, Elliot sued Vinashin to the British Court, requesting to pay back the sum of 13.2 million dollars that Vinashin allegedly owes to the fund.

This sum of money is a part of the international syndicated loan worth 600 million dollars for Vinashin in 2007, in which Credit Suisse was the lead arranger.

It was expected that Vinashin would make the first payment of 60 million dollars in December 2010. However, Vinashin could not fulfill the duty.

Elliot has been well known as the hedge fund which many times brought governments into court. Elliott previously won in a legal battle against the government of Peru in 2000, and settled a case with the Republic of Congo in 2008.

Meanwhile, The Star, a newspaper of Malaysia, has reported that at first, Vinashin proposed to pay 35 percent of bond par value to bond shareholders, or restructure the 600 million dollar debt package which must be paid off by 2015 into a new 13-year government-guaranteed loan package, which would be returned with no interest.

Maybank, the largest banking group in Malaysia, is part of a group of lenders which formed up a steering committee in 2010 to settle Vinashin’s debts. The other members include Credit Suisse, Elliott Advisors LP, Depfa Bank plc and Standard Chartered plc.

Meanwhile, creditors have suggested restructuring the debt into a new 600 million dollar 15-year debt package which has the interest rate in the first 10 years higher by 150 percentage points in comparison with the Libor interest rate, and the interest rate in the next five years higher by 50 more percentage points.

Also according to the newspaper, by 2011, Vinashin had defaulted on the loan three times. It missed another 60 million dollar payment deadline late last year, bringing the total of missed payments to 180 million so far.

In a press conference held several days ago, Maybank’s CEO Datuk Seri Wahid Omar reassured the public that the sum of money Vinashin is owing to the bank is inconsiderable in comparison with the bank’s assets, and it is really not an important loan.

The foreign creditors of Vinashin have raised their voice after the trial of Vinashin’s executives finished. On March 30, former CEO of Vinashin Pham Thanh Binh, was sentenced 20 years in jail by the Hai Phong City People’s Court, while the eight other former executives received sentences ranging from three to 19 years.

Pham Thanh Binh and Tran Van Liem have also been fined almost VND493 billion in damages, while the other seven defendants have to pay a total of VND109 billion between them.

The Wall Street Journal has commented that the trial could be seen as evidence showing that the government of Vietnam is tightening the control over state owned enterprises.

Thoi bao Kinh te Saigon some days ago reported that the Vietnam Shipbuilding Industry Group (Vinashin) was considering issuing bonds under the government’s guarantee to pay a part of its huge debt.

In related news, the name of Vinashin has once again appeared on local mass media after the taxation bodies showed that it still owes a big tax debt to the State.

The subsidiaries of Vinashin have got the loans worth up to 292.148 billion dong from the Vietnam Development Bank at the preferential interest rate to pay salary arrears to workers.

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